1. Field of Invention
The present invention relates to an Internet-based method of, and system for, enabling the customers of banks, brokerage firms, insurers and other financial institutions the freedom to exercise the rights they possess as holders of money so that they can optimize the utility and value of their money, and capture interest on owned money where currently surrendered in global financial marketplace.
2. Brief Description of the State of Knowledge in the Art
FIG. 1 is a schematic representation of the conventional “Uses of Money” where the “Specific Functions of Money” represent the general purposes of money in an economic framework. The “Specific Functions of Money” include all uses of money, from its inception to the present day, and define money's role in local, national and global economies; all economies using any form of money incorporate some and/or all of these functions in their use(s) of money.
FIGS. 2A and 2B, taken together, set forth a schematic representation illustrating the various conventional uses of/for money in the marketplace, including, but not limited to: purchasing and paying for goods and services, investing, earning interest, lending, borrowing, storing as value, and gifting.
FIG. 3 is a schematic representation illustrating the flow of money associated with conventional money transfer systems utilized in both physical money transfers and electronic money transfers in the global financial system. Money is transferred to another institution(s) and, at the end of the transfer period, the money and any accrued interest are transferred back to the owner of the money and/or the owner's bank or other financial institution.
Consumers and businesses loose interest income, on money that belongs to them but, which, is held by financial intermediaries in areas like: mortgage escrow, payroll withholding, any type of stored value/prepaid product or device, bill payment, tax payment, consumer rebates, merchants' bank accounts, and any other area in which, a financial intermediary holds a consumer's or business's money and either pays no interest on those funds or pays a suboptimal interest rate/yield on those funds.
Owners of money have many options from which to choose when selecting a bank or other type of financial institution for depositing (and subsequently investing) their money. Most financial institution customers assume (and rightfully so) that there is a tremendous amount of time and effort involved in first trying to ascertain where the opportunities exist to earn higher interest rates/yields on their money and, second, in actively transferring their money into and back out of those institutions' accounts and products to capture the higher rates offered. Several internet sites have aggregated financial information for consumers, with Bankrate.com being the most popular and oft-cited of these sites. However, Bankrate.com does not offer any transactional capability leaving all of the actual transfer work to the consumer. Furthermore, even with advanced transfer systems like Electronic Funds Transfer (EFT) and the Automated Clearing House (ACH), there are time lags, ranging from a couple of days to longer, during which time, the consumer is not earning interest on the transferred monies as they are deemed “in transit” and unavailable for use.
Due to the difficulties in finding better interest rates/yields and in transferring money, owners of money experience depositor/investor burnout (similar to mortgage burnout where mortgagees, after a certain period of time, cease searching for better mortgage rates, even though they exist in the marketplace, due to the amount of work involved) as they tire of seeking higher interest rates/yields and accept those, though almost always sub-optimal, offered by their “home” financial institution(s). Because of these factors, there is little incentive for the “home” financial institution(s) to offer highly competitive interest rates and yields for their accounts and products.
Through cash management, or “sweep”, accounts, financial institutions “sweep” customers' unused, available monies into other accounts and products that enable the customers to earn higher interest rates and yields on their monies than if those monies were left in a standard account/product. But even though these customers are considered more sophisticated than the average financial institution customer, recent evidence suggests that many financial institutions haven't been paying the appropriate (or advertised) rates on these accounts and products. (“Investors Get Shortchanged on Interest”, The Wall Street Journal, Feb. 15, 2005, p. D1 and “Savings: Sweep Yields Can Make You Weep”, Kiplinger's Personal Finance, May 2005, p. 92).
Many recent articles have highlighted the problems financial institution customers encounter when seeking higher interest rates/yields on their money. The article “Wall Street Cuts Yields on Investors' Cash” (The Wall Street Journal, Aug. 31, 2005, p. D1) states, “In a development that hurts investors, brokerage firms are quietly moving their clients' cash from money market mutual funds—the traditional default option—into lower-yielding bank accounts.”
There have been many attempts, through new technologies, to address these financial industry shortcomings. A brief review of the following U.S. Patents and Publications will provide a good overview of the state of knowledge in the art attempting to address the various problems recognized in the fields of finance, banking and investment management: U.S. Pat. Nos. 6,868,408 (Rosen), 6,609,113 (O'Leary, et al), 6,324,525 (Kramer, et al), 6,304,860 (Martin, et al), 6,240,399 (Frank, et al), 6,233,566 (Levine, et al), 6,112,189 (Rickard, et al), 6,049,782 (Gottesman, et al), 6,021,397 (Jones, et al), 5,933,817 (Hucal), 5,924,082 (Silverman, et al), 5,911,135 (Atkins), 5,852,811 (Atkins), 5,839,118 (Ryan, et al), 5,832,461 (Leon, et al), 5,297,026 (Hoffman), 5,082,275 (Nilssen), 4,751,640 (Lucas, et al), 4,507,745 (Agrawal), 20040153403 (Sadre), 20040044632 (Onn, Liav, et al), 30030236726 (Almonte, et al), 20030212641 (Johnson), 20030097331 (Cohen), 20030070080 (Rosen), 20020185529 (Cooper), 20020116331 (Cataline, et al), 20020091635 (Venkatachari, et al), 20020087461 (Ganesan, et al), 20020022966 (Horgan), and 20020013767 (Katz), each incorporated herein by reference as if set forth fully herein.
Finally, opening multiple accounts at multiple financial institutions to seek higher yields for cash is a very time-consuming, onerous process that requires a potential customer to read through complex and lengthy documents specific to each financial institution, submit all personal information numerous times, and to file reports from each financial institution regarding interest income earned annually with state and federal tax authorities.
In view of all of the aforementioned shortcomings, deficiencies and inefficiencies that exist in the local, national and global financial marketplaces, there is still a great need in the art for an improved method of and system for solving the problem(s) of surrendered interest-capturing opportunities in modern society, while avoiding the shortcomings and drawbacks of the prior art apparatus and methodologies heretofore known.